Tianfeng: Maintaining a "buy" rating for XTEP INT'L(01368), introducing two high-performance outdoor products.

Tianfeng released a research report stating that it maintains a "buy" rating for XTEP INT'L (01368), taking into consideration the continued pressure on the consumption environment in the second half of the year and the improvement in Skechers' profitability. It has adjusted profit forecasts, expecting the company's revenue for 2025 to be 14.6 billion RMB, 15.4 billion RMB, and 16.5 billion RMB (previously 14.7 billion RMB, 15.8 billion RMB, and 17.0 billion RMB); net profit attributable to shareholders is projected to be 1.4 billion RMB, 1.52 billion RMB, and 1.7 billion RMB (previously 1.36 billion RMB, 1.52 billion RMB, and 1.69 billion RMB). The company released its 2025 mid-year report. For the first half of 2025, the revenue from ongoing operations was 6.8 billion RMB, up by 7% year-on-year, with the main Xtep brand revenue at 6.1 billion RMB, up by 5% year-on-year, and the Professional Sports division revenue at 790 million RMB, up by 33% year-on-year. The operating profit from ongoing operations in the first half of 2025 was 1.3 billion RMB, up by 9% year-on-year, with the operating profit from the Professional Sports division increasing significantly by 237% to 80 million RMB. After ceasing operations of KSWISS and Paladin in the first half of 2024 with a loss of 110 million RMB, shareholders of the company saw a profit of 900 million RMB in the first half of 2025, up by 21.5% year-on-year. The balance sheet for the first half of 2025 remains strong, with a good cash position. Net cash and cash equivalents were 1.9 billion RMB, up by 94% year-on-year. The board of directors declared a mid-year dividend of 18.0 Hong Kong cents, with a payout ratio of 50.0%. As of June 30, 2025, the group had a total of 6,360 Xtep adult stores and 1,564 Xtep youth stores in mainland China and overseas, while Skechers had 155 stores in mainland China. In the outdoor sector, the company expanded its product matrix by launching two high-performance products, namely the "Feishi" hiking shoes and sandals, and the "Shanmao" off-road running shoes. In basketball, brand ambassador Jeremy Lin carried out a series of activities in Shenyang, including the opening of a Xtep store in Shenyang, a store signing event, and an interactive basketball game at Northeastern University. In addition, Xtep became the designated trophy sponsor for the 7th Asian University 3x3 Basketball Championship.